To reduce energy costs, the Ministry of Basic Industry (MINBAS) announced in early March that it would increase domestic oil production this year by more than 30% to a total output of 23.8 million barrels. Production of natural gas is projected at 660 million cubic meters--a 45% increase over last year. However, the rising price of imported oil threatens to cancel out much of the savings from domestic production.
Cuban oil is heavy crude used mainly for electricity generation and for various industrial applications. Domestic production supplies half the island's electricity needs and all its energy requirements in the cement industry.
MINBAS officials say domestic production has saved the country US$650 million in imported oil in the past eight years. By next year, the oil industry will be supplying enough fuel to produce 70% of the nation's electricity needs.
With a total foreign investment of US$600 million during the 1990s, Cuba's oil industry, run by Cuba Petroleo (CUPET), has quadrupled production since 1991. The government projects an additional US$700 million in foreign investment in the current decade.
Economy officials hope to reduce oil imports from the 42 million barrels imported in 1999 to 14 million barrels this year. As late as 1989, Cuba was importing at the rate of 91 million barrels per year from the former Soviet Union.